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Niger’s Refinery Now Supplies Fuel to Northern States

26 Oct 2013

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Dizeani Alison Madueke, Petroleum Minister


By Chineme Okafor                                   
The 20,000 barrels per day (bpd) Soraz refinery located in Niger Republic is now a major supplier of petroleum products to some states in northern Nigeria, THISDAY has learnt.

Nigeria has four refineries in Warri, Kaduna and Port Harcourt with a combined refining capacity of about 445,000bpd. These refineries however operate below their installed capacities as a result of poor maintenance and incessant pipeline vandalism.

Following a recent interview with the Governor of Bauchi State, Isa Yuguda, where he disclosed to THISDAY that the 180 megawatts (MW) independent power plant which the state plans to build would rely on Low Pour Fuel Oil (LPFO) from the Soraz refinery, informed sources in Nigeria's petroleum industry confirmed that the country had become a major destination for petroleum products produced at the Soraz refinery.

Investigations by THISDAY in Abuja however showed that states such as Katsina, Bauchi, Sokoto, and Jigawa, amongst others, actually consume petroleum products from the refinery located at Zinder, some 900 kilometres east of the capital of Niger, Niamey.

It will be recalled that President Goodluck Jonathan was represented by Governor of Katsina State, Ibrahim Shema, at the recent commissioning of the 20,000bpd capacity refinery which takes crude oil from Niger’s Agadem oilfield.

While Zinder is close to the Nigerian border, a former senior staff of the Nigerian National Petroleum Corporation (NNPC), who provided explanations on the workings of the refinery, said that the refinery would satisfy Niger’s domestic requirement, which is less than 5000bpd, thus leaving a huge surplus of about 13,000bpd for export majorly to Nigeria.

At the commissioning attended by some northern emirs, as well as some Nigerian businessmen, Katsina business mogul, Alhaji Dahiru Barau Mangal, was said to have signified his intention to partake in Niger’s petroleum sector, particularly in the transportation of refined petroleum products from Zinder to Nigeria and other neighbouring African countries.

The former NNPC offficial however confirmed that Mangal had started importation of petroleum products from Niger into parts of northern Nigeria. Noting that though the total amount of products from the refinery per day may not be enough to satisfy all parts of the North, it would complement supplies from other sources.

"I am very sure that Mangal Petroleum Company commenced fuel importation from Niger a couple of months back. Even though, Niger may not need more than 5000bpd or about 7000bpd of products from the refinery, the remaining will mostly find their way into northern Nigeria.

"That is not to say that will be enough for the region but it will go a long way in supplementing whatever that is supplied from other sources," the former NNPC official, who would not like to be mentioned, said.

When asked if such petroleum importation from Niger would equally enjoy the Federal Government’s subsidy patronage, the source stated: "Why not? If an importer has a permit from the PPPRA, such marketer is free to import from wherever he decides and in the case of Niger, I believe it will be cheaper, especially for those marketers up North that have been granted import permit by the PPPRA."

Nigeria’s daily fuel consumption as recently indicated by the Petroleum Products Pricing Regulatory Agency (PPPRA) is about 38.298 million litres out of which the refineries do not contribute substantially.

The condition of the refineries had necessitated PPPRA’s almost zero expectation status on them, meaning that whatever they eventually produce would be counted as bonus. The NNPC however puts current production at its Kaduna refineries at about 1.2 million litres. Yet, the state oil company accounts for 33 per cent of petroleum products imported into the country, while other major/independent marketers make up the remaining 67 per cent.

The PPPRA in the first quarter of 2013, issued petrol import permits to 32 companies with NNPC getting the highest allocation. The remaining 31 companies, comprising major marketers and independents, shared 67 per cent.

These companies are Aiteo Energy, Ascon Oil, Avidor Oil and Gas, A-Z Petroleum, Bovas, Conoil Plc, Dee Jones Petroleum and Gas, Dozzy Oil and Gas, Folawiyo Energy, Fresh Synergy Ltd, Forte Oil Plc, First Deepwater Discovery Limited, and Gulf Treasure Limited.

Others are Heyden Petroleum, Ibafon Oil Limited, Integrated Oil and Gas Industries, IPMAN Refining and Marketing Ltd, Mobil Oil Plc, MRS Oil & Gas Ltd, MRS Oil Nig. Plc, NIPCO Plc, Northwest Petroleum & Gas Ltd, Oando Plc, Obat Petroleum Ltd, RainOil Ltd, Rahamaniyya Oil Gas, Sahara Energy Ltd, Shorelink Oil Ltd, Swift Oil Ltd, Techno Oil Ltd and Total Nigeria Plc.

Africa’s richest man and President of Dangote Industries Limited (DIL), Alhaji Aliko Dangote, recently promised to reduce, by 50 per cent, Nigeria’s importation of refined petroleum products for local consumption by 2016.

He hinged this on the takeoff of his refinery, petrochemical and fertilizer complex to be located in Olokola free trade zone in Ondo State, which would be financed with a $3.3 billion credit facility from a consortium of banks.

Dangote and the banks had signed the financing agreement for the project early in September in Abuja, and it is expected to be Africa’s largest refinery, petrochemicals and fertilizer manufacturing complex.

Guaranty Trust Bank Plc (GTBank) and Standard Chartered Bank led nine other banks for the $3.3 billion syndicated facility. GTBank was the local coordinator, while Standard Chartered Bank was the global coordinator for the deal.

The other banks involved in the transaction are Access Bank Plc, Zenith Bank Plc, Ecobank Nigeria Plc, Fidelity Bank Plc, First Bank of Nigeria Limited, Standard Bank of South Africa Limited, United Bank for Africa Plc (UBA), FirstRand Bank, First City Monument Bank Plc and Diamond Bank Plc.

The project, which will cost a total of $9 billion, is expected to create about 9,500 direct and 25,000 indirect jobs, in addition to reducing the current volume of refined fuel imports by about 50 per cent and effectively stopping the importation of fertilizer.

Tags: News, Nigeria, Featured, Niger’s Refinery

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